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RC2 scraps plan to buy Publications International's children's division, blames high financing costs
By Angela McDaniels
Tacoma, Wash., Sept. 30 - RC2 Corp. said it will not proceed with the purchase of the children's publishing division of Publications International, Ltd., citing adverse capital markets and high financing costs.
The company had planned to use a new $325 million senior secured credit facility to fund the $163 million purchase. Bank of Montreal was the lead bank on the deal, which was expected to include a term loan and revolver.
"Recent shifts in the capital markets have impacted the availability of capital and increased the cost of financing," chief executive officer Curt Stoelting said in a company news release. "High financing costs coupled with other restrictive terms and conditions precluded us from structuring a transaction with the proper levels of operating and financial flexibility.
"We hope to revisit this acquisition when the economic environment and capital markets show improvement."
RC2 is an Oak Brook, Ill.-based producer of toys, collectibles and infant and toddler products.
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